Why Sweden gets away with health co-payments

Sweden has a bit of a reputation. Among progressive Australians it and its fellow Nordic nations are lauded for their social services, and that for the cost of a very high tax bill you are rewarded by living in one of the most equal societies on the planet.

But did you know that if you were to pop down to the local GP for a quick consultation or prescription, you have to pay for the privilege? I didn’t, until The Australian told me.

When the Abbott government announced the $7 GP co-payment as one of its budget savings earlier this year, it was just one of many reviled measures. The intention was to introduce a price signal that would hopefully reduce unnecessary visits to the doctor. And while the revenue raised by the payment was supposed to go to a Medical Research Fund, the Department of Health announced they expected one million fewer visits to the GP in the year following the policy’s introduction, saving more than $400 million a year.

Following the budget, there has been a chorus of opposition from groups like the Australian Medical Association (AMA) and National Seniors Australia, arguing that by hitting primary care services the most disadvantaged in our society will delay visiting the doctor and filling their prescriptions, increasing pressure on hospitals and emergency admissions later on.

But conservative economists like Judith Sloan point out that a number of countries, including Sweden and Finland, have co-payments for doctors’ visits, so why is it such a big deal for Australia to do the same thing?

So I decided I would take a look to see just how these co-payments work elsewhere.

To fund Medicare, the scheme that gives Australian residents access to health care, most taxpayers pay a Medicare levy of 2.0 per cent of their taxable income.

The $7 proposed by the government is low compared to the countries mentioned above. In Sweden the charge is between $15-$30 depending on your local council. In Finland it’s just over $20. However, in these countries there are additional limits on how much you have to pay for your healthcare.

The current Australian proposal is to limit the number of visits requiring payment to 10 per year for those on concession cards, such as pensioners. All other Australians need to pay the $7 fee for all visits to the doctor, including additional services such as blood tests or scans.

In Finland the limit for which co-payment is required is three for everyone. In Sweden, there is no upper limit on the number of visits, but if you spend between $140-$170 on primary care or specialist consultations in a single year then all further visits are completely free. They even have limits of $55 on what specialists like gynaecologists or oncologists can charge for consultations.

Finland has a higher limit of $980 in a single year, but that covers almost all medical expenses including hospital fees. Both countries have much lower limits for the total that can be spent on medication in a single year – $350 in Sweden and $880 in Finland compared to $1421 in Australia (though here it’s only $350 if you’re a concession card holder).

Finally, the most important fact is that the figures above represent the absolute maximum to pay. The idea of not finding a GP who “bulk-bills” or paying non-subsidised rates to visit a private specialist because of the quality of care is an anathema.

So Sweden and Finland definitely make up for the extra cash you have to hand over at the beginning. There are still many other variables that need to be considered in any comparison with Australia: because both countries have had income-related pensions similar to our superannuation for so much longer, their minimum pensions are actually substantially lower than in Australia (almost $500 a month lower).

But the number of people who had never earned an income in their lifetime would be low, and there are more additional payments for housing and the like. Municipal governments in those countries also retain the flexibility not to charge any of the healthcare payments mentioned above for the elderly who are in this situation.

On top of all that, there are issues around different costs of living and the purchasing power of each currency that make a direct comparison really difficult.

Nevertheless, while our friends at The Australian and elsewhere shouldn’t point to Sweden as evidence that there’s nothing wrong with the proposed changes to Medicare, it’s still true that the introduction of a primary care co-payment does not signal the end of universal health care. But while critics of this proposed policy change are helping to destroy the government in the polls, everyone is avoiding some real questions that are much more important. Like, are we sure that everyone who needs a bulk-billing doctor can access one quickly? Or, do we pay our pensioners, disabled and unemployed enough to ensure they can afford to stay healthy? And do we actually pay enough tax to afford the health system we demand? Would it be simpler to increase the Medicare levy? Answer them and we’ll be healthier than even Sweden.